Shares edge up on economic optimism

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(China Daily)
Updated: 2009-09-09 08:11

Chinese stocks rose for a sixth day on speculation that data this week will show the nation's economic recovery is strengthening, and the government will take extra steps to support equities.

The Shanghai Composite Index added 49.36 points, or 1.7 percent, to 2,930.48 at the close, capping a six-day, 9.9 percent advance. That's the longest winning streak in four months. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, rose 2.2 percent to 3,170.97.

"There's speculation the data will show the recovery is well under way," said Fu Hao, a Guangzhou-based fund manager at E Fund Management Co. "Trading may be volatile ahead of the release."

The government is due to release August figures for trade, industrial production, urban fixed-asset investment, retail sales and inflation on Sept 11. The central bank may also give lending and money supply figures this week.

Stocks have rallied this month on signs the government will take steps to support equities after the benchmark index entered a bear market. Regulators on Sept 4 raised the amount foreign funds can invest in equities, a signal that Credit Suisse Group AG said indicates the "government's intention to stabilize market confidence and prevent a further slump" in stocks.

The Shanghai index lost 22 percent in August, the first monthly decline this year, on concern a slowdown in lending will derail an economic recovery.

Industrial & Commercial Bank of China Ltd, the country's biggest listed bank, rose 2.1 percent to 4.9 yuan, the biggest contributor to gains on the index.

Jiangxi Copper Co, the largest copper producer, advanced 3.5 percent to 37.74 yuan. Poly Real Estate Group Co, the second-largest developer by market value, surged 4.2 percent to 24.58 yuan.

Top coal producers gained on expectations the reported closure of mines will benefit larger producers. China Shenhua Energy Co rose 3.9 percent to 32.62 yuan. China Coal Energy Co rose 3.3 percent to 12.49 yuan. Datong Coal Industry Co advanced 6.6 percent to 36.39 yuan.

China suspended production at 157 coalmines in Pingdingshan, Henan province, after an explosion at a local shaft early Tuesday morning.

Hang Seng gains

Hong Kong stocks rose for a fourth day as the central government said it will sell sovereign bonds in the city, boosting confidence in the mainland's support for the city as a global financial hub.

The Hang Seng Index advanced 2.1 percent to 21,069.81 at the close of trade. It had fallen as much as 0.1 percent earlier. The Hang Seng China Enterprises Index, which tracks H shares of mainland companies, rose 2.5 percent to 12,275.66.

The Hang Seng Index has rallied 86 percent since hitting a four-month low on March 9.

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